LEGAL MALPRACTICE INSURANCE

Legal Malpractice Insurance

Legal Malpractice Insurance, Attorney Liability Insurance: Coverage, Limits, Deductible, and Premium, Optimized for Your Firm

If you’re a first-time buyer, we suggest you start here: Legal Malpractice Insurance FAQs – Answered

I. Legal Malpractice Insurance – How We Serve You

We’re legal malpractice insurance brokers and subject matter experts, who enjoy a strong relationship with AIG, CNA, Travelers, and many other “A”-rated legal malpractice insurers.

Our mission is to obtain the best terms that are available in the market for every law firm.

Here’s an example: in January, 2015, a 3-attorney firm received a renewal quote of $8,194 from its malpractice insurer of many years, and then contacted us to obtain competing quotes. 

We sent its application to 12 “A”-rated insurers, eight of which offered a proposal. The winning insurer’s proposal was $5,409, for the same coverage, limits, and deductible as the renewal quote.

We renewed the account with the same insurer for a premium of $5,579 in 2016, and $5,731 in 2017.

Thus, the firm’s premium decreased by over 30% compared to its 2015 renewal quote, three years in a row, for identical coverage, because we aggressively shopped its application.

Can we obtain similar results for your firm? The only way to find out is if we obtain proposals for you.

The larger point is that most attorneys don’t comparison shop, and thus often buy inadequate, overpriced coverage.

Why? Because they don’t know that legal malpractice insurance pricing is inaccurate and highly variable, or that the market is intensely competitive.

The premiums that a legal malpractice insurer charges are essentially guesses, because it doesn’t know how much it will spend to defend and settle claims, which are its biggest expense.

Further, pricing varies widely among insurers, i.e., the highest quote that the firm in the example above received was $8,857, 64% more than the lowest quote, for the same coverage.

This shows how comparison shopping helps firms obtain the best terms (see our success stories for many more examples).

In fact, if a firm doesn’t comparison shop at least every third year, it may not only miss out on better terms, it usually receives inferior terms, because its insurer has no competition for its account.

If you do shop, you’ll find that more than 15 “A”- rated legal malpractice insurers compete in almost every state – including yours – 7-10 of which will likely offer your firm a quote, if it’s well-managed.

II. Legal Malpractice Insurance – Optimize Your Coverage 

A. “Put your best foot forward”: thoroughly explain your practice and procedures to insurers by submitting a completed application, all required supplements, and if necessary, an addendum.

B. “Shop ‘til you drop”: work with a broker who’ll submit your application to every “A”-rated malpractice insurer that’ll likely offer your firm coverage, based on its risk profile. Maximizing competition is the key to getting the best terms.

C. Avoid quotes, which overemphasize price, and instead request proposals from each insurer, at various limits, deductibles, and coverage options. Then compare them to your renewal terms.

III. Legal Malpractice Insurance – Next Step

You can complete an application, as explained below, but if you’d rather find out whether or not your firm is getting the best terms before doing so, then send an us email with your firm’s attorney count, primary practice areas, office location, and current malpractice insurance limits, deductible, and premium (for extra precision, provide each attorney’s month and year of hire). 

We’ll review the information, and advise you whether or not we can obtain materially better terms for your firm.

If we don’t think we can, then we’ll recommend that you stay with your current insurer.

If we do think we can, then we’ll recommend that you complete an application. You can download a blank one from our applications page, or send us the most recent application that your firm completed for its current malpractice insurer; we’ll copy it onto a new application, and send it to you to review.

As mentioned above, we’ll send your firm’s completed application to all suitable insurers for proposals, and after every insurer has offered its best proposal, we’ll send you an analysis, highlighting the best ones so you can easily compare them to your current terms. 

If you accept any of the proposals that we obtained, then the insurer that offered it will pay us a commission, i.e., a percentage of the premium. That’s our only compensation – we never charge you a fee to use our services.

We thus have every incentive to find you the best terms available in the market.

IV. Legal Malpractice Insurance – Attorney Feedback

“I recently worked with Curtis…I thought he did an excellent job staying in touch with me and giving me fair advice, without pressure to purchase anything in particular…he actually advised me to simply renew with my current carrier, despite the fact that it would not have led to any monetary compensation for him…” (Rating: 5 stars out of 5.)

Full review: http://www.yelp.com/biz/lawyers-insurance-group-washington

We received this email from the owner of a law firm for whom we procured malpractice coverage after its existing coverage was non-renewed:
“From beginning to end, you have served us so well, keeping me informed every step of the way.  Thank you Curtis!  I will recommend you without hesitation to any lawyer in need of a professional insurance broker.”

V. Legal Malpractice Insurance Q&A

Who are the leading legal malpractice insurers?

AIG, CNA, Chubb, Hartford, Travelers, Westport, and Zurich are the best-known. Others include Aspen, Markel, and Wesco, plus specialty insurers like Admiral and Evanston, which cover firms the other insurers won’t, i.e., those that have a poor claims history, or handle patent, securities, or other ‘high-risk’ matters.

All of these insurers are A-rated, and have expert underwriters, claims staff, and mal-practice defense counsel. We have a strong relationship with each of them.

What policy limits are available?

Most of the major insurers offer limits up to $10 million per claim/$10 million annual aggregate; a few offer limits up to $15M/$15M. We can procure higher limits in the excess insurance market.

What size and types of firms do you work with?

Our roster includes everything from solos to firms with over 100 lawyers, multi-practice firms to one-practice firms in every specialty from Administrative law to Workers Comp. law, and special situations, i.e., firms that are merging with or acquiring another firm, have had their coverage non-renewed due to malpractice claims, etc.

Which firms pay the least and most?

Appellate, criminal defense, and immigration firms pay the least, followed by civil/ insurance defense firms. Class action, securities, and patent firms pay the most, fol-lowed by real estate and personal injury/medical malpractice firms. Firms in other practice areas firms pay somewhere in between these extremes.

However, every insurer has its own rating formula for each practice area, and most firms experience a wide variance in pricing from insurer to insurer, and thus benefit greatly from shopping for competing quotes.

How often should my firm shop for competing quotes?

Every third year.

You don’t need to shop more often, unless your practice changes dramatically or your insurer’s renewal quote is unfairly high, because market conditions don’t change that much from year-to-year. Too, frequent shopping encourages frequent switching of in-surers, which will work against your firm in the long run, because many insurers will assume that you’re a “bargain hunter” who’ll leave after a year or two to save a few dollars, and thus won’t offer you their best quote.

Conversely, shopping infrequently, i.e., every four or more years, all but guarantees that your firm is getting a bad deal, because your insurer has no competition for your ac-count.

We’ve been with our current insurer for a long time. Why consider switching?

Because the legal malpractice insurance market is much more competitive today than it was 5 – 10 years ago, when insurers like AIG, CNA, Westport, ALPS, and Minnesota Lawyers Mutual were dominant.

Since then, aggressive, well-capitalized insurers like Aspen, AXIS, XL Catlin, Markel and Wesco have either entered the market or expanded their offerings. As a result, many more malpractice insurers now offer law firms broad coverage and competitive pricing.

Savvy firms are capitalizing on this by exploring the market, and they’re being rewarded.

We know this, because nearly every time a firm engages us, we “beat the pants off” of its current terms. This happens whether the firm bought its coverage through a local agent, a national broker, the agent for a malpractice insurance program, or directly from a mal-practice insurer – even the one endorsed by its state bar association (which is often the least competitive, because the insurer knows that many lawyers will follow the bar’s rec-ommendation without shopping around).

Why should my firm optimize its malpractice insurance?

Because if it doesn’t, then it’s either overpaying or underinsured: if your firm has ade-quate coverage and limits, but overpays for them, then it’s wasting money – every year. Conversely, if your firm’s premium seems reasonable, but it could obtain broader cover-age and higher limits for the same or less cost from another major insurer – which it likely can, if it’s a good risk and shops around – then staying with your current insurer is a poor risk management decision.

Besides being competitive, the legal malpractice insurance market is also stagnant, so insurers battle for every account. That’s why 7 – 10 insurers will usually offer a quote to a firm, if it hasn’t had any recent claims, avoids ‘high-risk’ matters, and has good con-flicts and docketing systems.

However, to benefit from this, you need to engage with a broker who’ll work hard for your firm, i.e., ensure that its application discloses all required information, while presenting the practice in the best light; identify all viable insurers for your firm based on its size, practice areas, etc., and aggressively market to and negotiate with them on your firm’s behalf. That’s where we come in.

VI. Legal Malpractice Insurance – Who We Serve

We optimize legal malpractice insurance for:

  • New law firms, including solo practices.
  • Established firms of all sizes and in all practice areas, including high-risk practice areas like Intellectual Property, Securities, Sports/Entertainment, Real Estate, and Personal Injury/ Medical Malpractice/Class Actions. 
  • Special situations: law firms that have had their legal malpractice insurance can-celled or non-renewed; are merging or disbanding; are in or emerging from bankruptcy; etc.
  • Independent Contractors.

VII. Legal Malpractice Insurance – Further Reading

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